The Week in Review

Weekly Market Recap: U.S. and Canada

It was a short but rough week for U.S. markets, with stocks sliding across the board. Tech took the hardest hit, dragging down the broader indexes as we saw investor sentiment souring. Ongoing inflation concerns, cautious Fed commentary, and geopolitical tensions all weighed on risk appetite. Meanwhile, Canadian markets bucked the trend, finishing higher and showing surprising resilience in the face of global volatility.

Looking at the numbers, the Nasdaq 100 tumbled 4.39%, leading the declines. The Dow Jones dropped 3.78%, and the S&P 500 wasn’t far behind, losing 3.08%. In contrast, the TSX posted a solid 1.63% gain, standing out as the only bright spot in an otherwise downbeat week.

Major Economic Stories

This week’s economic narrative centered around inflation trends and monetary policy caution. Between Canada’s cooling inflation and the Bank of Canada’s rate hold, policymakers are walking a tightrope as we navigate our way through global uncertainty.

Canada Inflation Slows Sharply

Canada’s inflation eased to 2.3% in March, below expectations.

The deceleration came largely from falling gasoline prices and a sharp drop in wireless service costs. However, food inflation accelerated, driven by restaurant prices following the end of tax breaks.

• Core goods inflation remained soft outside of food categories

• Energy markets reacted to OPEC+ output news, easing price pressures

• Annual inflation now tracks below the BoC’s 2.5% projection

• Monthly inflation rose modestly at 0.3%, hinting at mixed pressures

• Read the Full Release

Bank of Canada Hits Pause on Rate Cuts

The BoC held interest rates steady at 2.75% in April.

This is a shift in tone, with Bank officials emphasizing caution over aggressive easing in the face of trade policy uncertainty. The central bank laid out two distinct economic outlooks tied to U.S. tariff decisions.

• Market was split on expectations going into the decision

• Monetary Policy Report included risk analysis of U.S.-China-Canada trade

• Interest rate path will now be more data- and event-driven

• Inflation expectations rose slightly due to policy uncertainty

• Read the Full Release

Watch my Full Report on the Bank’s Two Scenarios on YouTube

U.S. Retail Sales Surge in March 

U.S. consumers spent big in March, led by autos.

The 1.4% jump showed strength in discretionary spending categories and a surge in car sales ahead of potential tariffs. While autos led, several categories showed solid gains, even though we did say weakness in gas and furniture.

• Consumer resilience continues to support economic growth momentum

• Year-over-year retail sales also improved, reflecting a broader trend

• Tariff concerns are influencing short-term purchasing behavior

• GDP-boosting retail control group rose 0.4%, pointing to economic strength

• Read the Full Report here.

Key Takeaways From this Week’s Economic News

BoC Presses Pause – But Not for Long?

The Bank of Canada’s rate hold at 2.75% might look uneventful on the surface, but it actually signals a meaningful shift in tone. After seven straight rate cuts, the Bank clearly isn’t rushing to provide more monetary support, especially with tariff risks muddying the outlook. By presenting two scenarios—one where tariffs remain targeted, and another where a full-scale trade war erupts—the Bank is sending a strong message: monetary policy is now at the mercy of geopolitics.

To me, this feels like a return to a more cautious, reactive central bank. They’re keeping their powder dry in case they need it. If tariffs escalate and demand weakens, we could see cuts resume later in the year. But for now, the BoC’s message is clear: let’s see how this plays out before taking more action. It’s a reminder that rate policy isn’t just about inflation anymore—it’s also about managing risk in a highly unpredictable environment.

Canada’s Inflation Dip: More Than Just Gas Prices

The large drop in Canada’s inflation rate in March caught many off guard. At first glance, the drop to 2.3% looks like it was all about falling gas prices. But dig a little deeper, and you see a broader pattern emerging. Wireless services saw their biggest monthly price drop in years, which suggests increased competition is starting to have a real impact on consumers. Meanwhile, the rollback of tax breaks caused restaurant and food prices to spike, and that should be a reminder of how quickly inflation can rebound when policy supports are removed.

The good news is that this inflation print gives the BoC some breathing room. If we continue to see soft energy prices and competition-driven cost savings, rate cuts could come back on the table, especially if growth shows signs of stalling. But the risk here is uneven inflation. If food costs remain high, that hurts lower-income households more, and policymakers may struggle to justify more easing without seeing broader price stability.

U.S. Retail Sales Strength: A Temporary Pop?

No doubt March’s surge in U.S. retail sales is impressive, especially the 5.3% leap in auto sales, but my guess is it’s not the cleanest signal of consumer strength. A lot of this activity seems tied to buyers rushing in before auto tariffs kick in, which makes the jump feel more like a one-off than the start of a new trend. That said, other categories like electronics and restaurants also saw gains, and that points to a healthy consumer still willing to spend.

But here’s where I think it gets tricky. If it does turn out that these purchases were pulled forward, April and May could show a drop-off, skewing growth data. And with inflation still not fully tamed, strong consumer spending could put upward pressure on prices again. For now, this is a net positive for the economy—but it’s one that may come with a catch in the months ahead.

THIS WEEK’S POLL QUESTION
(Results in Next Week’s Newsletter)

An important piece of news this week, and my lead story below, is Ontario’s move to eliminate the interprovincial trade barriers in an expedited manner. A trade agreement like this is complicated but way overdue, and in light of the tariff challenges we’re living through, may actually be a national security issue. Which leads me to wonder whether the federal government should step in and mandate the changes rather than leaving it up to the provinces.

What do you think?

LAST WEEK’S POLL RESULTS

Last week I asked you to weigh in on whether the global trade system has been wiped out, and it wasn’t even close. Over 80% say yes, we’ve moved on to a new system. I do tend to agree, although there is a small slice of me that still holds on faint hope that we survive this and get more back to normal once we’re through this craziness. I’ll say though, it’s a very small slice, sadly.

Comments of the Week

Yes

“When your partner stabs you, it is time to leave an abusive situation.
The same goes for countries.” - alucciasno

“I think worldwide trust for the US will be (already is!) broken as the US moves towards authoritarianism, bullies neighbours and tries to assert dominance through threats. Trump thinks countries will trip over themselves to grovel to the US. Some might, but I think that Canada, the EU, Japan and a few others will quietly move towards each other and away from them. No one can stay on top forever. I think the the US decline will be ugly. It will have to get pretty bad in terms of loss of democracy and financial ruin, before enough citizens revolt. By that time the US will not be Number One.” - betty_m_mayer

“To me, the threats made by DJT with his tariffs Worldwide seems to be the 90 day pause will orchestrate countries all over the World looking for better trading partners than the USA! He broke the trade agreements between Canada, USA & Mexico! His arbitrary tariffs aren't based on facts, or deficits to the USA! Imagine putting tariffs on an island only inhabited by penguins? Or a huge tariff on a tiny island who only produces vanilla beans? It's ridiculous! He paused because Canada's Prime Minister, Mark Carney, and members of the EU, plus Japan started selling US Treasury Bonds! That slow sell off of the T Bills which would directly effect the USA's ability to borrow put an immediate halt in what DJT had planned, even after tanking the stock market in US and globally! The USA can't be trusted any longer, so a new era will begin and the World will move away from the USA.” - gardens_1

“We knew eventually there would be a decline from the U.S. but nobody predicted it would be this quick. With Trump in office and all the questionable (to stay politically correct) moves he has taken, well let us just say he took a sledgehammer to that timeline and said "I WANT IT NOW". As a result we all suffer.” edwardmawusi

“The USA has been declining in the last 20-30 years. They don't want taxes so the governments borrow. No wonder they are in debt to the tune of Trillions. And when states use property taxes to raise money the people complain. They want everything for nothing. Trump is a bully and even he will die someday but what horror will come after him. If the USA can let that criminal in the White House, is the devil next?” - monicaambs18

No

“I think both answers are correct this week. We are entering a new era because the global monetary system is transitioning to incorporate blockchain and stable coins but the U.S. dollar will still remain the worlds reserve currency. Tariff wars seems like it is mostly just posturing and will soon end.” - aloquicious

TRADE

Ontario Pushes Interprovincial Trade Bill

• Ontario introduces legislation to ease internal trade restrictions

• Ford claims potential $200B GDP boost from freer domestic trade

• Critics say real gains may take years, not immediate

• Trade deals signed with Nova Scotia, New Brunswick

Ontario is moving forward with a new bill aimed at eliminating provincial trade barriers, part of a broader strategy to insulate Canada’s economy from U.S. tariff threats. Premier Doug Ford said removing internal trade restrictions could provide a massive economic boost, while at the same time, acknowledging that the legislation’s real impact depends on reciprocal moves by other provinces.

Ford’s Pitch for Domestic Unity

Framed as a patriotic economic defense against Trump-era tariffs, Ford’s “Protect Ontario Through Free Trade Within Canada Act” proposes recognizing standards and certifications from other provinces—if they do the same. He cited up to $200B in annual GDP gains from reduced internal friction, though many caution that figure assumes full coordination and deep harmonization across jurisdictions. $200B in annual GDP gains? Remind me again why this wasn’t done years ago?

Regulatory Snags and Realism Check

Some economists are skeptical of Ford’s claims, warning that real gains could be minimal unless provinces fully commit.

Marc Lee, a senior economist with the B.C. office of the Canadian Centre for Policy Alternatives, says that things might not work out as simply as you might hope.

Still, Ontario is pressing ahead, targeting 23 existing exemptions under the Canadian Free Trade Agreement. New allowances include cross-provincial alcohol shipments and simplified transport rules. Critics also warn about unintended consequences, such as eroding local health and safety standards.

Read the Full Story here.

THE FEDERAL RESERVE PT. 1
Fed Chair Powell: Tariffs Will Hit Growth, Fuel Inflation

• Powell warned tariffs will slow U.S. growth

• Markets plunged after his speech, Dow falls 1.7%

• Fed expected to stay cautious on rate moves

• Inflation risks complicate monetary policy further

Perhaps the biggest story out of the U.S. this week was Federal Reserve Chair Jerome Powell issuing a stark warning that tariffs under Trump’s trade policy could seriously damage the U.S. economy. Speaking in Chicago, Powell said inflation would likely rise and growth slow, directly complicating the Fed’s job.

Markets React Sharply to Tariff Jitters

Powell’s remarks immediately rattled Wall Street, wiping out earlier gains. The Dow dropped 690 points, while the S&P 500 and Nasdaq fell even further. The speech came just days after Trump hiked tariffs on China and hinted at further action. Powell said volatility was expected but underlined that the scale of economic disruption was growing.

Policy Limbo Amid Political Pressure

Powell reiterated the Fed’s commitment to independence and a cautious rate stance. “We’re in a wait-and-see mode,” he said, and noted that the full effects of tariffs are still playing out. On thing is clear; just like here in Canada, it’s political and trade uncertainty now dominate the Fed’s outlook, even more than inflation metrics alone.

Read the full story here.

THE FEDERAL RESERVE PT. 2
Trump Threatens to Fire Fed Chair Powell

• Trump reignites feud with Fed Chair Jerome Powell

• Suggests firing him over slow interest rate cuts

• Legal fight could challenge Fed’s independence

• Powell reaffirms central bank’s apolitical stance

In a related story, President Trump has revived the controversial idea of removing Federal Reserve Chair Jerome Powell over his frustration with interest rate policy. Trump, who originally nominated Powell, now says “termination cannot come fast enough,” blaming the Fed for not reacting fast enough to economic headwinds caused by his own tariffs.

A Political Flashpoint in Monetary Policy

Trump’s comments are the latest escalation in an ongoing political tug-of-war over Fed independence. Powell made it clear in public remarks that the Fed “will never be influenced by political pressure,” but Trump’s comments could still trigger legal challenges or undermine market confidence.

Fed Focuses on Inflation Despite Pressure

So far, Powell and the Fed are standing by their cautious approach even in the fact of political pressure. With inflation hovering near target and economic uncertainty rising, Powell says clarity—not pressure—will guide decisions. Still, the president’s rhetoric adds fresh instability to already volatile markets.

Read the Full Story here.

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COMMERCE

Judge Rules Google Illegally Dominated Ad Tech Market

• U.S. court finds Google held illegal monopoly in ad tech

• Judge says conduct harmed competition and publishers

• DOJ may now seek forced divestiture of key ad products

• Google plans to appeal ruling, shares dip 1.4%

In a major antitrust ruling, a U.S. judge found that Google abused its dominance in two online advertising markets. The decision gives the Justice Department the green light to pursue structural changes, which possibly includes breaking up parts of Google’s ad business.

Another Blow in Big Tech Crackdown

U.S. District Judge Leonie Brinkema in Alexandria, Virginia ruled that Google “willfully acquired and maintained monopoly power” in ad exchange and publisher ad server markets. The judgment stops short of final remedies but does set the stage for a future hearing to determine whether divestitures are necessary. It follows a previous ruling on Google’s search dominance and comes as the DOJ also looks at Amazon and Meta.

Regulatory Chill Across Tech Sector

This case is one example of a growing trend toward aggressive enforcement of antitrust laws, with experts say it could shift regulatory risk premiums higher across all major tech firms. Google, downplayed the financial impact, but did acknowledge the ruling and promised to appeal.

Read the Full Story Here.

TAXATION
U.S. Tax Proposal Could Slam Canadian Investors

• U.S. bill targets Canadians with higher tax on U.S. securities

• Could override tax treaty and hit RRSPs with 35% withholding

• Aimed at retaliating against Canada’s digital services tax

• SIMA, KPMG warn investors not to panic—yet

I’m going to go out on a limb and say that most of you reading this have investments, and in many cases that includes U.S. holdings. Well, a proposed Republican tax bill could significantly raise the tax burden on Canadians who invest in U.S. stocks and bonds. The legislation would increase the withholding tax to 50% on certain U.S. income streams, if passed, and could nullify key provisions of the Canada-U.S. tax treaty.

Retaliation Over Digital Tax Moves 

The bill, introduced by the House Ways and Means Committee, responds to foreign digital service taxes, including Canada’s 3% levy on tech giants. (I had a feeling that big ‘win’ would come back to bite us.) It proposes a steep, staged increase in tax withholding for countries the U.S. sees as targeting its firms, and would affect billions in cross-border investments.

Investor Uncertainty and Industry Pushback

The bill is still early in the legislative process, but the investment industry is on high alert. If implemented, the changes could hurt Canadians’ RRSPs and mutual funds holding U.S. assets. The Securities and Investment Management Association (SIMA), is monitoring the issue, and experts are cautioning against making any premature portfolio changes until there is more certainty on this proposal.

Read the Full Story Here.

OTHER NEWS FROM THE PAST WEEK

What Is Stagflation?
With inflation still elevated and growth faltering, economists are warning of a return to stagflation—where high prices persist alongside weak job creation and GDP, complicating central bank responses.

Canada Maple Syrup Industry Faces Trade Uncertainty
Tariffs and shifting trade policies are clouding the outlook for Vermont and Canadian maple syrup producers, who now face higher costs and potential export disruptions heading into their busiest season.

Ex-Google Exec Launches Anti-App Startup
A former Google product chief is creating an “anti-app” platform aimed at reducing digital overwhelm by merging multiple functions into a single streamlined tool focused on mental clarity and ease of use.

Duty-Free Shops Suffer Amid U.S. Travel Slowdown
Canadian duty-free retailers are reporting major revenue declines due to reduced cross-border travel, with some shops warning of layoffs or closures if U.S. tourism doesn’t rebound soon.

Canadian Firms Warn Staff: Avoid U.S. or Use Burner Devices
Canadian businesses are telling employees to avoid travel to the U.S. or use burner phones due to rising data privacy concerns linked to new American surveillance rules and trade tensions.

Hong Kong Suspends U.S. Mail Services
Citing logistical issues and worsening diplomatic relations, Hong Kong has temporarily halted postal services to the U.S., adding more strain to already fragile global shipping networks.

Why Retirees Should Keep Some Stocks
Despite market volatility, financial planners advise retirees to maintain partial exposure to equities to preserve growth potential and protect against longevity risk in low-yield bond environments.

Ohio’s Child Social Media Law Challenged in Court
Tech industry group NetChoice is suing Ohio over its new law restricting minors’ access to social media, arguing the law violates constitutional free speech protections and parental authority.

Back in the day, one of 3M’s engineers, Spencer Silver, accidentally invented a weak glue while trying to create a super-strong adhesive (oops). For years, no one knew what to do with this not-so-sticky glue, until a colleague, Art Fry, got annoyed that his bookmarks kept falling out of his church hymnal. Lightbulb moment! He used the glue to make sticky notes that could be repositioned and boom, Post-it Notes were born. What started as a “failed” invention is now in basically every office on Earth. Classic 3M: turning happy accidents into billion-dollar hits.

Market Movers

S&P 500 Returns | Week At-a-Glance

TSX Returns | Week At-a-Glance

Top 10 Weekly Gainers

Top 10 Weekly Losers

10 Most Overbought Stocks

10 Most Oversold Stocks

The Relative Strength Indicator (RSI) can provide a signal that suggest a stock is either overbought or oversold.
📈A stock that has an RSI over 70 is considered to be in “overbought” territory. This might suggest that the stock is due for a pullback, however it is not a recommendation to sell.
📉A stock that is trading with an RSI below 30 is considered to be in “oversold” territory. This might suggest that the stock is due for a recovery, however it is not a recommendation to buy. Always perform your own due diligence.

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